Dyna-Mac

Dyna-Mac: OCBC Secs upgrades to Buy from Hold following the proposed acquisition of 70% of Paliy Marine Fabricator, which fabricates structural blocks for semi-submersibles. Assuming full utilization and productivity level similar to its yards in S’pore, the house believes this purchase could potentially increase DMH's maximum output by 70%. It expects DMH to ramp up operations at the new yard progressively over the next 12 months, with the company confident of getting sufficient new orders to fill the yard by leveraging on a good track record and close working relationships with global clients. Adds, DMH is expanding its other businesses, which should help diversify its product offerings and lower its risk profile. It raises its fair value to $0.45 from $0.34 after increasing its FY12-13 EPS forecasts by 20-40%. The stock is up 2.5% to $0.41 and is now trading back above its 20 and 50-day moving averages.